EASTHAMPTON — Treehouse Community founder Judy Cockerton has won a $100,000 Purpose Prize for Intergenerational Innovation for her work in creating opportunities for seniors to be involved in foster care.

The prize is sponsored by the American Association of Retired Persons and awarded by Encore.org, a nonprofit that encourages seniors to find meaningful ways to improve their communities after retirement.

At the Treehouse Community, families with adopted or foster children live next door to people over 55 who support the children as “honorary grandparents.” Cockerton founded it off of Button Road in 2006.

Kerry Homestead, community facilitator at the Treehouse, said news about the award spread through the community on Wednesday.

“Everyone is so proud of her and proud to be a part of this community,” she said. “Her work really fits into the context of what we can do in the third chapter of our lives.”

Cockerton, 61, of Sharon, said she was “over the moon” when she found out she was chosen from over 800 nominees for all the Purpose Prizes. A total of five were awarded.

She said she plans to reinvest the $100,000 in foster-care innovation. “That’s what I do,” she said Wednesday.

Cockerton has been a foster parent and adopted a child, and said most people believe those are the only two ways to be involved in the foster-care system. “I know that it’s too much to ask of most people, so what happens is that millions of Americans turn and walk away from the children in their communities who need them the most,” she said.

Besides the Treehouse Foundation, Cockerton also has established a camp for foster children and a program to help siblings in the system stay connected, and launched the Re-Envisioning Foster Care in America Initiative.

Cockerton said the success of the Treehouse Community has made it a nationally recognized model for innovative foster care. The first Treehouse-inspired community opened in Portland, Ore., last year, and Treehouse in Easthampton has hosted visitors from Arizona and Washington interested in recreating the intergenerational community.